UNIT 1
PRODUCT PLANNING AND PRICING DECISION
The product manager and the marketing manager need to take product decisions in several areas. The product decision areas are as follows:
1. Product Design:
Product design plays an important role in gaining customer acceptance. Product design is the process of creating new and improved products. The product designer's role is to combine art, science, and technology to create new and improved products.
Exporters must be proactive in designing and re-designing the products. For effective product designs, managers need to conduct:
Marketing research - to identify customer’s preferences.
Research and development- to come up with innovative designs and to modify the designs of existing products.
2. Product Mix/Product Line Decisions:
The exporter should decide together to concentrate on one product or deal with a product mix/product line. Product mix involves a set of products, which a exporter may offer to the For instance, a firm may offer food products, toiletries, detergents, and so on. Product line is a group of related products. A food items product line may include milk powders, health drinks, fruit juices, confectionaries, etc. Some firms may concentrate on a single product may be to concentrate all their efforts on that product or may be due to lack of resources. Other firms may go for a product mix, especially; FMCG (fast moving consumer goods) companies prefer product-mix in order to make optimum use of resources, and to generate higher returns.
3. Product Packaging:
The exporter should design the proper packaging. Packaging i serves various purposes -protection, preservation, and promotion of the product. Packaging depends upon several factors such as nature of the products, price of the product consumers of the product, etc.
For instance, it the product is meant for upper class audience, then the product packaging must be of high quality and appropriately designed.
Nowadays, environmental aspects need to be considered especially when the product is exported to developed nations. i Packaging which is non-degradable- plastic, for example-is less in demand or rejected. Bio-degradable, recyclable, reusable packaging is now the order of the day.
4. Product Labelling:
Labelling indicates the contents of the product. Like packaging effective labelling can promote the product. Developed countries insist on certain instructions on the product's labels. For instance, the European Union insists on the amount of pesticides and insecticides used on horticultural products. Also, on packaged food products and medicines, specific instructions must be labeled.
The EU also insists that labelling must be done in at least 4 major languages spoken in European Union (English, Spanish French and German). Even in India, it is advisable to have multilingual labels, especially in the case of medicines.
5. Product Pricing:
Products must be properly priced. The exporter should consider important factors while pricing the product, such as costs, demand, competition, nature of the product, nature of consumers, objectives of the firm, and so on.
The exporter must choose a proper method of pricing, such as markup pricing, marginal cost pricing, target return on investment, cost plus pricing, going rate pricing, etc.
6. Product Positioning:
Positioning refers to the marketing efforts directed at creating and maintaining a distinct image in the minds of target audience of the brand product vis-a-vis competing brands The exporter should adopt an effective positioning strategy in order to create a distinct and favourable image in the minds of the target customers. Positioning can be done on the basis of the features, use, price, etc.
7. Product Promotion:
The exporter has to resort to promotional activities to inform and to induce the target customers to purchase the products. An effectively promoted product can be easily sold in the market. Therefore, a firm must decide about the promotion mix, which includes advertising, sales promotion, sponsorships personal selling publicity, and so on.
8. Product Warranty:
A warranty is a assurance from the manufacturer that the product tell perform as stipulated. The marketer should decide about the period of warranty, and the nature of warranty whether on the entire product, or certain parts of the products, and so on. If the exporter sells in different markets, then he may have to decide either to give the same warranty in all the markets, or to customize for each market or region.
9. Branding Decisions:
Branding decision forms an important aspect of product planning. Firms must consider the essentials of branding while giving brand names, and marks to their product. For instance, a brand name should be easy to pronounce, and should be as short as possible, and relevant to the product. Language is vital in overseas markets.
10. After-sale-service:
The exporter should decide about the after-sale-service decisions, especially in the case of durables, and on industrial items such as machinery.
Effective after-sale-service is vital to build long-term customer relationship. Therefore, business firms should train their service force not only in terms of skills to maintain or repair the product, but also to have a proper attitude towards the customers.
11. Product Distribution Decisions:
Product planning also involves distribution decisions. The marketer should select the right distribution channels to reach to the customers.
The choice of channels depends upon several factors, such as i nature of the product, nature and size of customers, philosophy of the firm, competitor’s strategy, and so on. As far as possible, the number of channel intermediaries must be less, so as to provide better value to the customer.
Meaning and Techniques of Branding
It is a process of giving distinct name or a mark to a product to give it a distinct identity as compared to competing brands. Selecting a brand name is the primary task of brand management. William Shakespeare may be wrong-'What's in a name. You can call rose by any other name. Brand names make a lot of difference. For instance, brand names like Mercedes, Nike, Cartier, etc. command lot of respect and goodwill. The brand name must be relevant to the product, easy to pronounce, appealing to the target customers, and so on.
There are different approaches in selecting brand name:
1. Individual Brand Names:
A multi-brand company may adopt individual brand name for different products. For instance, HUL have different individual brand names for its soaps such as Lux, Liril, Lifebuoy, etc. Several firms like P&G, Nestle, Cadbury, Suzuki, GM and others have adopted this strategy.
Companies may use different brand names for different quality products within the same product class. For instance, HUL uses the brand name of Wheel for lower quality washing powder, and Surf for higher quality brand.
The main advantage of individual brand name strategy is that the company does not attach its reputation to a single brand name. If a particular brand fails in the market, the reputation of the firm may not get affected.
2. Blanket Corporate Name:
This approach is followed when a company uses the corporate brand name for its diverse product categories. For instance, the Tata Group uses this brand name strategy for several of its products such as Tata Tea, Tata Coffee, Tata Salt, Tata Steel, and so on.
The main advantage of this strategy is that it develops customers trust in the brands of reputed firms like that of Tata Group Sony, Philips, etc.
3. Corporate-cum-Individual Brand Names:
Certain companies may combine the corporate name and the individual brand name to create a distinct brand identity. For instance, Cadbury adopts this strategy for its brands such as Cadbury Dairy Milk, Cadbury Gems, Cadbury Fivestar, and so on.
The main advantage of this strategy is that the brands get the advantage of corporate brand equity. The company may also spend less on product introduction and promotion.
4. Family Brand Names:
When a company adopts the same brand name for different brands in a particular product line is called as family brand name. For instance, Amul brand name is used by Gujarat Cooperative Milk Marketing Federation (GCMMF) for several products such as Amul Butter, Amul Ice-cream, Amul Chocolates, Amul Ghee, AmulMilk, etc. Also, Nestle provides the same brand name to ready to eat/serve food items- Maggi Noodles, Maggi Ketchup, and so on.
The main advantage of this strategy is that it is less expensive to introduce related products in a particular product line. The company may also adopt a common advertising campaign for its family brand names.
5. Different Brand Names in International Markets:
MNCs may sell the same brand under different brand name in the international markets.
Examples:
(a) KFC (Kentucky Fried Chicken) in United States and in other PFK (Poulet Frit Kentucky) in Quebec, Canada (because Quebec is the predominantly French speaking province of Canada).
(b) Lay's in United States and elsewhere.
Walkers (U.K.)
(c) Axe (body spray) launched in France.
(d) Lynxin U.K., Ireland, Australia and China (because in these 4 countries Axe brand name was already trade marked).
6. Names of Founders:
The company may also introduce the products with the names of founders or inventors. Examples are Colgate, Ford, Nestle, etc.
7. Typical Numbers:
At times, companies may follow certain numbers such as 553(cigarettes), 501 (cake soap), and so on.
8. Combination of Names and Numbers:
There can be a combination of names and numbers. This includes 7 Up, 7 O'clock blades, and so on.
9. Names with Relevance to the Product:
Some firms make a deliberate attempt to devise brand names that have relevance to the product category. For instance, Nike sportswear brand, named after the Greek Goddess of Victory. Other brand names that have relevance to the product category include Tips and Toes (nail polish).
10. Names Communicating Attributes:
Some firms name the brands that communicate attributes of the product. Examples include:
Revital (health supplement capsules from Ranbaxy)
Fair & Lovely face cream (creates hope fair and beautiful complexion).
Touchwood paint for wooden furniture.
Meaning:
The terms packaging and packing are used interchangeably. However there is a difference between the two terms. Packing refers to a protective covering used for transportation of goods, where is coma packaging refers to the containers in which product reach to the ultimate consumer. Packaging can also be referred as a process of developing and designing packages.
Importance of packaging
The importance of packaging is explained as follows:
1. Production to products:
Packing protects the product in transit and also while handling the same. For example, glassware can be protected from breaking in transit with the help of suitable packing.
2. Preservation of Quality:
Packing preserves, the quality of the product. In the absence of suitable packing former item like food products, chemical etc., may get exposed to moisture and may deteriorate in quality. Therefore, the marketer must consider the nature of the product, climatic conditions, etc., to design packaging.
3. Promotion:
Now-a-days, manufacturers take lot of efforts to produce good packages as they carry advertising value. Especially, in the case of impulse purchases, packaging attracts attention of the customers and may induce them to buy the product.
4. Conformance to Buyer's Specifications:
In the case of specific orders, proper packing is needed so that it conforms to the specifications of the buyer. If not the buyer may not accept the goods.
5. Conformance to Standards:
Packing is also required to conform to certain standards laid down, especially in the case of export goods. Developed countries insist on reusable packaging or eco-friendly packaging.
6. Consumer Preference:
Packing facilities consumer choice. This is because consumers can easily identify the brand names, trademarks and other matter on the packages.
7. Convenience to Dealers:
The dealers must not find difficulty in storing the products. The packages should not be unnecessarily bulky so as to avoid the wastage of space on the shelves or racks.
8. Convenience to Customers:
Packing offers convenience in handling the product. For example, cooking oil comes in plastic bottles, which are easy to handle and to use.
9. Commands Higher Price:
Properly packed items command higher price in the market. For instance, French perfumes are packed in attractively designed bottles and therefore, they command higher price.
10. Quality:
A package which carries the popular mark or brand name carries an assurance of quality, and buyers often buy the product without opening the package.
Essentials of a Good Packaging
The following are the important requirements of a good package:
1. Convenience to Dealers:
The dealers must not find difficulty in storing the products. The packages should not be unnecessarily bulky so as to avoid the wastage of space on the shelves or racks.
2. Dependable:
Consumers often rely on the packages and buy the product. Whatever is indicated on the package must be available inside the package in terms of quality, and quantity.
3. Ease in Identification:
Packages should be such that they are easily identifiable by the customers, dealers, and others. The printed matter and symbols, or marks on the packages must be such that the customers are familiar with.
4. Ease in Displaying:
Packages must be convenient to display in the showcases or on the racks at the stores. They should be attractive, compact and conveniently displayable.
5. Economy:
The cost of the package must be reasonable. If it is a fashionable or gift item, then packing may be a bit expensive. But in case of day-to-day use items, unnecessary expense must not be incurred in designing and producing the package.
6. Conform to Standards:
The package must conform to standards laid down by the Bureau of Indian Standards and such other organisation especially in the case of foreign trade.
7. Re-Use Value:
The package may offer a re-use value to the consumers. Therefore, the package may be so designed to facilitate the re use purpose. For instance, coffee bottles may be so designed that it can be used as a glass or mug.
8. Handiness:
A package must be handy. A customer should find no difficulty in carrying it conveniently.
9. Attractive:
Packages must be attractive. They should attract the attention of the prospects or buyers and make them to buy the product. It should have the advertising value.
Product labelling is any written or graphic communication on the package or on the product. Labelling indicates the contents of the product. Like packaging, effective labelling can promote the product. Developed countries insist on certain instructions on the product's labels. For instance, the European Union insists on the amount of pesticides and insecticides used on horticultural products. Also, on packaged food products and medicines, specific instructions must be labeled.
The EU also insists that labelling must be done in at least 4 major languages spoken in European Union (English, Spanish, French and German). Even in India, it is advisable to have multilingual labels, especially in the case of medicines.
Information on the Labels:
The labels provide information relating to:
Name of the brand and/or logo
Name of the company that produced the brand Nature of the product
Place of origin (manufactured)
Description of goods/contents/ingredients
Date of manufacture and the batch number.
Statutory information such as expiry date, side effects of the product.
Need/Advantages of Labelling
1. Brand Identification:
It helps the customers to identify the product. Customers can identify the brand name and/or logo which is labeled or printed on the product package or container.
2. Brand Image:
It gives distinct image of brand with the help of its brand name/ logo on the label. Brand image is the perception of the brand in the minds of the customers and others. Based on attractive display of brand name/logo, special features of the product etc., labelling can help to create a distinct image of the brand.
3. Brand Promotion:
Labelling helps to promote the product. With the help of font type used for lettering, font size, colour, graphics, etc., labelling can help to promote the brand. Attractive labelling on products or packages catches the attention of the buyers.
4. Statutory Requirements:
It helps to fulfill statutory requirements, such as statutory warnings, expiry date, etc. For instance, on cigarette packs, it is statutory to mention -Cigarette smoking is injurious to health.
5. Transportation:
It enables the transportation company to know the nature of the product. Accordingly, precautions are taken while loading or unloading. For instance, fragile products like glass need to be handled with care.
6. Purchase Decision:
It facilitates purchase decision. For instance, a buyer may look for the contents, date of manufacture, date of expiry, etc., and accordingly decide to purchase the product.
7. Use of the Product:
Labelling also facilitates proper use of the product. For instance, in the case of medicines details such as dosage is indicated, and accordingly the consumer (patient) takes the medicine. In the case of certain clothes, washing and ironing instructions are stated on the labels, which help the user to follow them.
8. Custom Clearances:
Developed countries insist on certain instructions on the labels on the packages or products that are exported from other countries. For instance, the European Union insists on labels to indicate the amount of pesticides and insecticides used for horticulture products. The customs may conduct a check based on the contents on the labels and accordingly may allow customs clearance.
Marking refers to put certain marks on the carton boxes or container packages for proper identification. The exporter needs to provide information in respect of exporter's mark, importer's mark, port of shipment and destination, gross and net weight, handling instructions (such as fragile goods handle with care, this side up) date of shipment, and so on.
Requirements of Marking of Export Goods
When the exporter ships a container load or more, simple identification of your cargo should be enough. However, if the exporter is shipping a smaller quantity - one or few cartons, the exporter must provide detailed identification. The cartons must be marked with water proof markers and with big and bold letters that can be read even from a distance:
The following are the essentials of a good marking of export goods:
1. Consignee Details: The consignee's name, address, contact number, and the order number must be mentioned on the carton. This will facilitate proper delivery of cartons by the Shipping company to the right consignee.
2. Exporter's Details: The cartons must be marked with the name, address, and contact number. If any problems arise during transit, the exporter can be easily notified of the same.
3. Country of Origin: The exporter's name and address need not be the country of origin. The exporter may have imported the goods and then re-exported. Therefore, there is a need to mention the country of origin. Some countries give special tariff concessions, if the goods are originated from certain countries.
4. Contents: The exporter may mark the carton with the contents inside. However, if the product is expensive or high in demand, one may not indicate the contents for the fear of theft. Whether to mark the cartoon with the contents, the exporter and the importer may decide about the same. At times, the shipping company or the customs may insist on the same.
5. Marking in English Language: The exporter needs to mark in the cartons in English language, unless specified by the importer. The customer may indicate that the carton be marked by the local language of the importer. In that case, there is a need for proper translation.
6. Symbols and Phrases: The exporter needs to mark the cartons with symbols and phrases for proper identification and handling during transit. Readymade waterproof stickers are available for symbols and phrases.
7. Identify the number of cartons: There is a need to identify their number of cartons that the exporter is shipping on each carton. For example, it the exporter is shipping 5 cartons, the numbers would be one of five, two of five, three of five, four of five, and five of five. This type of numbering will ensure that all the five cartons will arrive together at the port of destination.
8. Mark on All Sides: If possible, the cartons may be marked on the 5 visible sides-four sides and at the top. However, marking must be there at least on two visible sides. This will enable quicker identification of the cartons.
9. Weight and Measurement: The exporter must make sure that the net and gross weight and dimension markings are on their outside of the carton. Preferably the internationally accepted standard is the metric system such as meters, liters, kilograms, etc.
Pricing of a product depends upon several factors. A marketer must consider certain factors before finalizing the prices. The factors influencing the prices are broadly divided into two groups, as shown below:
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I. INTERNAL FACTORS
1. Costs:
The exporter must consider costs while fixing prices in the overseas markets. The costs can be broadly divided into groups:
Fixed costs.
Variable costs.
An exporter may consider only variable costs, when a small part of the output is sold in the overseas markets. In such a case, the exporter would recover all the fixed costs from the domestic market. However, if an export sells a major part of output in the overseas markets; both fixed and variable costs are considered while fixing prices in the overseas markets.
2. Credit Policy:
Pricing may be influenced by credit policy of the firm. If an exporter provides longer credit (say 180 days): higher prices may be charged because; there are more chances of bad debts in case of longer credit period. However, when the credit period is shorter (say 30 days); the exporter may charge lower prices to generate more orders.
3. Corporate Image:
Exporters enjoying a good image in the overseas markets may charge higher prices as compared to those firms, which do not enjoy reputation in the overseas markets. Customers trust firms with good corporate image and, therefore, they do not mind paying higher prices. For example: firms with distinct image like Nike, Rolex Watches and others charge higher prices as compared to other competing brands.
4. Objectives of the Firm:
Exporter must consider the objectives of the firm, while fixing prices. For instance:
If the objective of a firm is to increase return on investment; It may charge a higher price.
If the objective is to capture a large market share; firm may charge a lower price.
5. Promotional Activities:
Pricing is related to promotional activities. If a firm undertakes heavy advertising and sales promotion, then pricing planning must ensure that this promotional cost will be recovered, at least in the long term. It is often observed that highly advertised or promoted brands command high price as compared to lowly promoted brands
II. EXTERNAL FACTORS
6. Competition:
Exporter needs to consider the degree of competition in t market. When there is high competition, prices may be low and vice-versa. The price of competing brands, as well as those of substitutes must be considered while fixing prices. Generally, the price must be within the range of that of the competitors
7. Consumers:
Exporter needs to consider the nature of consumers while fixing the prices in the overseas markets. For instance:
If the customers are price sensitive (especially in the developing countries), exporter may charge lower price
If the customers are not price sensitive (especially in the developed countries), exporter may charge higher price especially in the case of superior quality products should consider various consumer factors while fixing prices.
8. Demand:
Price of goods to a great extent depends upon demand. For instance, an increase in demand may lead to an increase in price even though there may be no rise in costs. Demand may increase due to economic conditions in the market, problems with the supplies of competitors and so on.
It is to be noted, that increase in demand need not result in increase in prices, as nowadays, socially responsible marketers pass on a part of the benefits of large-scale production and distribution to the consumers.
9. Economic Conditions:
The economic conditions prevailing in the market must be considered while fixing prices. During the times of recession when consumers have less money to spend, exporters may reduce the prices to influence buying decision of the consumers However, during economic boom, exporters may charge a higher price.
10. Market Opportunities:
The marketer may consider the market opportunities for growth. If the market promises long term growth prospects, then the marketer may consider fixing lower prices.
OBECTIVES OF EXPORT PRICING
The first step in developing a pricing strategy is to develop pricing objectives - what the pricing decisions must accomplish. Pricing objectives must support the broader objectives of the marketing department (such as increasing market share) and that of the organisation's overall objectives (such as enhancing shareholders' wealth or enhancing corporate image)
The following are the main objectives of pricing:
1. Survival:
It is the most important objective of pricing: especially when companies are faced with the problem of overcapacity, intense competition, or changing consumer wants. Most firms adopt survival objective during recession, when customers on an average have less money to spend.
2. Market skimming Objective:
The firms that launched a new product in a market may adopt the market skimming strategy. in this case, the product is launch at a high price and then gradually it is reduced over a period of time.
For market skimming to be successful, there must be certain conditions, such as:
The firm must have a degree of security in the form of patents.
The product must have unique selling proposition.
3. Early Cash Recovery:
Firms that face liquidity problems or those that believe that life of the product or market is likely to be short may adopt a pricing strategy designed with the objective to generate a high cash flow and lead to an early recovery of cash. Such firms may provide a series of special offers and discounts, and adopt a strict credit policy, so as to increase immediate sales and achieve prompt payment.
4. Market Entry Barrier Objective:
Firms may adopt low price strategy with the objective of preventing others from entering the market. The potential entrants would recognize the low returns available and the dangers of getting involved in a price war. In this way, existing firms may be able to minimise the amount of competition in the market.
5. Customer Satisfaction Objectives:
A good number of quality-focused firms believe that profits result from customer satisfaction, as the primary objective. They believe that by focusing solely on short-term profits, a company loses sight of winning customers and retaining them. These firms instead develop pricing objectives based on pleasing customers over the long term.
Firms may adopt a high value strategy, where product quality is high and the price is moderate (neither high, nor low) instead of adopting premium strategy where high quality product is sold at high price. However, it is to be noted that some customers, especially, belonging to the upper-upper class would be satisfied with premium strategy, as they enjoy prestige status with highly priced items.
6. Social Responsibility Objectives:
Social responsibility objectives often play a major role in pricing decisions of the government and of non-profit organisations. Even professionals like doctors may adopt social responsibility as their pricing objective.
Incoterms (International Commercial Terms) are a standard set of terminology, which was created by the International Chamber of Commerce (ICC) in 1936. The INCO Terms are used universally, defining the key parts of freight forwarding for traders, buyers, sellers and banks.
Users of INCO Terms:
Incoterms are used today by practitioners and traders, anyone involved in the supply chain of delivering goods overseas will probably come across incoterms, including:
Traders
Producers
Buyers
Sellers
Governments
Banks
Coverage of INCO Terms:
The language that was agreed by incoterms guidance covers the following areas of international commerce and trade:
Tasks involved in shipping
Parties to hold contract
Responsibility (Buyer or Seller) of risk
Delivery of goods (buyers and sellers)
Duties relating to Insurance of goods
Customs duties and taxes.
Types of INCO Terms
1. Ex Work (EXW)
2. Free Carrier
3. Carriage Paid To (CPT)
4. CIP - Carriage and Insurance Paid To
5. Delivery at Terminal (DAT)
6. Delivery at Place(DAP)
7. Delivery Duty Paid(DDP)
8. Free Alongside Ship(FAS)
9. Delivery Duty Unpaid(DDU)
10. Free on Board (FOB)
11. Cost and Freight (C&F or CFR)
12. Cost, Insurance and Freight (CIF)
Under the FOB contract, the cellar quotes a price which includes all the expenses incurred until the goods are actually delivered on board the ship at the port of shipment. It constitutes:
Ex-factory price
Packing charges Customs and port Charges documentation charges
Export duty, if any
Inland transportation cost
Wharfage and Porterage
Other expenses, if any.
Profit margin is added and export incentives are deducted.
FOB Price= cost of goods + Expenses up to Board the ship + Profit - Export Incentives
Under FOB quotation, the seller loses his right of lean on the goods and the right of stoppage in transit. This is because the shipping company is under the contract of the buyer. In India, export incentives such as duty drawback, are given on the basis of FOB price.
It includes FOB price plus freight plus marine insurance up to the port of destination. It is preferred by the important over FOB because there are fewer responsibilities for him as the exporter takes all risk for fluctuations in the rates of freight and insurance unless otherwise specified in the contract.
CIF Price = FOB Price + Freight + Marine Insurance
Seller and buyers application under CIF contract
The seller must:
In addition to obligations mention under FOB, the seller must pay freight and insurance premium.
The buyer must:
a. Pay Clearing charges and import duties.
b. Make a payment to exporter as per the commercial invoice.
The important may request the exported to quote C&F price which means FOB price + cost of transportation of the goods to the port of destination.
C&F Price = FOB Price + Freight
Seller and buyer obligation under C&F contract:
The seller must:
In addition to obligations under FOB, the seller must pay freight charges of the shipping company.
The buyer must:
a. Arrange any pay for insurance
b. Pay clearing charges and import duties.
c. Make a payment to exporter as per the commercial invoice.
FOB Value shall be calculated as follows:
(a) FOB Value = Ex-Factory Price + Other Costs
(b) Other Costs in the calculation of the FOB price shall refer to the costs
Incurred in placing the items in the ship for export, including but not
Limited to, domestic transport costs, storage and warehousing, port
Handling, brokerage fees, service charges, etc.
2. Formula for ex-factory price:
(a) Ex-Factory Price = Production Cost + Profit
(b) Formula for production cost,
(i) Production Cost = Cost of Raw Materials + Labour Cost +
Overhead Cost
(ii) Cost of Raw Materials shall consist of:
(AA) Cost of raw materials
(BB) Freight and insurance
(iii) Labour Cost shall include:
(AA) Wages
(BB) Remuneration
(CC) Other employee benefits associated with the
manufacturing process
(iv) Overhead Costs, (non-exhaustive list) shall include, but not
limited to:
(AA) real property items associated with the production process
(insurance, factory hire and leasing, depreciation on
buildings, restore and maintenance, taxes, interests on
mortgage)
(BB) leasing of and interest payments for plant and equipment
(CC) factory security
(DD) insurance (plant, equipment and materials used in the
manufacture of the goods)
(EE) utilities (energy, electricity, water and other utilities directly
attributable to the production of the good)
(FF) research, development, design and engineering
(GG) dies, moulds, tooling and the depreciation, maintenance
and repair of plant and equipment
(HH) royalties or licenses (in connection with patented
machines or techniques used in the manufacture of the
good or the right to manufacture the good)
(II) inspection and testing of materials and the goods
(JJ) storage and handling in the factory
(KK) disposal of recyclable wastes
(LL) cost factors in computing the cost of raw materials, i.e.
Port and clearance charges and import duties paid for
Dutiable component.
References
- Export Marketing Imperative by Michael R. Czinkota
- International Marketing and Export Management by Edwin Duerr, Gerald Albaum